CASUALTY LAW

How long does an insurance agency with a business entity license have to notify the Director pertaining to a change of business address?

30 days

All of the following are CORRECT regarding additional supplementary payments EXCEPT: A: supplementary payments are paid in addition to the limits of liability B: supplementary payments will increase the premiums C: supplementary payments may reimburse an employee for a day of lost wages if they have to give a deposition in court D: supplementary payments are limited to specific amounts in the contract

A

All of the following are exclusions to the Garage Coverage form, Section II, liability, EXCEPT: A: Accidental bodily injury to a customer arising from garage operations. B: Liquor liability C: Care, custody and control of the property of others D: Injuries to workers in the garage

A

K has a property policy and would like to know which type of property is not protected against loss under the policy. The part of the contract that K should read is the: A: Exclusions= B: Declarations C: Insuring Clause D: Conditions

A

Other than collision coverage most closely resembles: A: named perils coverage. B: collision coverage. C: open perils coverage. D: all risk coverage.

A

The purpose of preventing an insured from collecting twice on losses that are Subrogated is to: A: reinforce indemnity B: to hinder the insured's rights C: to allow the insurer to collect twice D: None of the Above

A

What is the maximum length of time a producer license can be suspended by the Director? A: A producer license suspension is for a period of time deemed appropriate by the Director. B: 6 months C: 12 months D: 3 years.

A

Which of the following statements about oral estimates of premium charges for auto insurance is FALSE? A: Oral estimates are binding on the insurance company. B: The physical presence of the applicant can be required for the completion of a final application. C: Oral estimates must be provided to potential personal auto applicants in the insurance producer maintains in office in a municipality with a population of 500,000 or more, D: Some producers or designated representative may refuse to provide an oral estimate of auto insurance premium rates.

A Oral estimates made by an agent or company are not bind on the carrier.

E is a non-resident Illinois producer who holds a resident license in Iowa and has a Premium Fund Trust Account (PFTA) into which premiums from Illinois insured's are placed. Where can this PFTA be established

A PFTA into which premiums are placed involving risks located in Illinois must be established in a financial institution under which Illinois courts have jurisdiction.

What is a permissive driver and what, if any, coverage rights are they entitled to under a personal lines auto policy?

A permissive driver has permission to use the car of another and they have identical coverage granted to any insured under the policy while using the vehicle.

Which of the following individuals would not be considered as being an insured under a Commercial General Liability policy? A: A real estate agent who is also employed as the insured's executive secretary. B: The insured's plant manager while showing a group of kids from the local school around the plant on a field trip. C: The administrator of the insured's estate after the insured dies. D: Another business the insured purchased two months ago

A. A real estate agent of the insured can only be an insured under the CGL if that real estate agent IS NOT an employee of the insured

Which of the following individuals would not be considered a family member under the definition of a Personal Auto Policy? A: The 18 year-old nephew of the insured staying for a week long visit. B: The 17 year-old foster daughter of the insured. C: The insured's 67 year-old mother who lives with the insured. D: The insured's spouse who live with the insured.

A. A relative staying for a short visit is not considered to be residing with the insured and therefore does not meet the definition of a family member for PAP purposes.

An auto insurer must provide at least 30 days prior days notice of policy cancellation to an insured, unless the reason is A: nonpayment of premium. B: fraud on the part of the insured. C: The insured violated the policy terms. D: The insured increased the original risk accepted in a measurable fashion.

A. All personal lines policies (auto, fire, EC and others) require the insurer to provide at least 30 days prior notice unless the reason for the cancellation is nonpayment of premium which requires only 10 days advance notice.

H owns a small retail store which sells handbags. Which type of exposure would be most threatening to H's business? A: Premises and operations B: products and completed operations== C: All of the Above D: None of the Above

A. Considering that H's business is a small store that does not produce the items or construct anything, the most threatening exposures would be the actions of employees and the physical hazards of the store.

Which of the following is not a supplementary payment found under the terms of a Commercial General Liability policy? A: The per occurrence limit paid to an injured person to whom the insured was liable due to a negligent act of the insured at the place of business. B: All expenses incurred by the insurance company. C: All court costs levied against an insured in a lawsuit. D: Lost wages incurred by the insured up to $250 per day for assisting the insurer in the defense of a claim brought against the insured

A. Supplementary payments are not paid as a part of any of the liability limits of a CGL, they are paid in addition to those liability limits.

Which coverage part of a Commercial Package Policy protects a business against losses which arise out of the negligent acts of the insured that are not related to the use of an automobile? A: Commercial General Liability policy. B: Commercial Crime. C: Commercial Inland Marine. D: Business Owner Policy

A. The CGL protects businesses against losses which arise out of the negligent actions of the business, including the actions of the employees when a third party is harmed by the negligent actions (bodily, property or personal injuries). It can be monoline or inserted into a CPP

Under the Insurance Claims Fraud Prevention Act all of the following are privileges or responsibilities insurance companies have, EXCEPT: A: The ability to object to the use of information compiled under the Act. B: Access to the information compiled under the Act. C: Use of the information compiled under the Act. D: Cooperation with law enforcement requesting information compiled under the Act

A. The information must be forwarded to the requesting party with 30 days of receipt of the request for liability coverage disclosure.

Which statement that follows is most accurate pertaining to the Illinois producer ethics requirement? A: Each producer must complete a 3 credit hour ethics class within each two year renewal period. B: Each producer must complete a 3 credit hour ethics course, which may be taken either in classroom or self study format within each two year renewal period.== C: Ethics is an optional course for every producer and they can take whichever number of credit hours in the topic as the see fit.. D: A 3 hour ethics course in self study format is required every calendar year to maintain a producer license.

A. The three hour ethics requirement must be completed in a classroom setting offered through a certified provider.

Which of the following statements is considered to be the most restrictive standard when applying for a casualty policy? A: warranties B: representations C: concealment D: material misrepresentation

A. Warranties are facts that are sworn to be absolutely true. No matter what an insured would state could be used against them as fraud and thus is the most strict standard that can be applied to a contract.

What is the main advantage of the Workers Compensation policy to the employer? A: The employer is benefited by the fact that WC is the workers exclusive remedy and no other method of compensation is therefore available to the employee outside of the WC process. B: There is no advantage to the employer. C: It is very inexpensive for all employers to handle a loss by the employee in the workplace in this manner. D: Employers have many common law defenses available to them to prevent large sums being paid on WC claims

A. When WC was first proposed over one hundred years ago the main selling point to business owners was that the employee could not sue or collect any money for injury and illness arising our of employment other than through the exclusive remedy of WC.

Which of the following methods of loss valuation reinforce indemnity? A: Replacement Cost== B: ACV C: Absolute Liability D: Proximate Cause

Actual Cash Value (ACV) is a loss valuation that reinforces the principal of indemnity because it takes into consideration the idea of usage over time. ACV is determined by taking current replacement cost minus depreciation which prevents profit from loss.

Which insurance companies are required to participate in the Illinois assigned risk pool for Workers' Compensation?

All companies licensed to write Workers' Compensation and employers' liability insurance in Illinois must participate in the Assigned Risk Pool.

When an insurance company suspects that an insured has engaged in a fraudulent act, that insurer is required to

An insurance company must report to the Director factual information pertinent to suspected or actual insurance or premium fraud.

What organization may provide the service, on behalf of the Director, that will allow insurers to report suspected insurance fraud?

Any organization or agency so designated by the Director.

The designated representative of an insurer must provide an oral estimate of auto insurance premium charge if the municipality in which the representative has his office has a population of

Any producer or designated representative of an auto insurer maintaining any office in any municipality of 500,000 or more population must supply non-binding oral estimates of premium charges upon request anywhere within the state such a request is made without requiring the physical presence of the applicant..

Otto has taken his expired insurance card and altered it to make it appear it is valid and current although it is not. If Otto is convicted of a crime in this regard he will have committed a

Anyone found guilty of altering an invalid insurance card to make it appear valid (or anyone who makes, sells, or otherwise makes available of counterfeits an insurance card has committed a Class 4 felony.

D was stopped at a traffic light one day when M, did not break and caused $8,600 worth of damage to D's brand new auto. In settling the claim M's insurer wanted the mechanic to use used parts to repair D's vehicle. D contented that since the car was new that new parts should be applied. If D and M's insurer cannot agree on how to settle the claim which of the following would occur? A: the claim will go to appraisal B: the claim will go to arbitration== C: the insurer has final say D: the insured must sue the insurer

B

J is an employee of TNT safety company and is told by his boss to drop off letters to the post office. Which type of auto will cover J if he causes an accident while delivering the letters? A: Owned B: Nonowned C: Hired D: Newly Acquired

B

The resident licensing fee for a Limited Lines Car Rental license is A: $50 every year B: $180 every two years== C: $50 every two years D: $250 every year.

B

The type of crime coverage form that would insure either damage to a safe or cash register that occurs due to forcible entry with felonious intent into an insured's premises is: A: Robbery inside the premises- Robbery or Safe Burglary of Other Property B: Burglary C: Forgery and Alterations D: Robbery Outside the Premises

B

Under a Commercial General Liability policy, an insurer has the right to audit an insured to determine: A: solvency of the business B: calculation of premium C: compliance of risk with regulations D: warranty of safety of the risk

B

Once a producer license lapses, how long does the licensee have to seek reinstatement of the producer license? A: 90 days. B: 180 days C: 12 months D: There is no ability to reinstate a lapsed producer license

C

Which of the following concepts is false concerning loss exposures payable under a Commercial General Liability policy? A: Premises and Operations are standard exposures under the CGL and are automatically included in coverage. B: If an employee causes loss to a customer of the insured, while transacting business and due to a negligent action, but is away from the business premises at the time of the act, it is not covered under the CGL. C: The Products Liability exposure is generally purchased by manufacturers. D: The Product and Completed Operation Liability exposures do not come standard on a CGL and must be added by endorsement for additional premium

B

The trust officer of a bank, while performing the incidental duties of his employment, advises bank customers from time to time about maters related to insurance policies. This trust officer A: is guilty of a Class A misdemeanor.== B: is exempted from any producer licensing requirements based on these activates. C: must be licensed in all major lines of insurance. D: must be paid by commission when performing such duties for a bank or other financial institution.

B Illinois allows specific occupations to be exempt from licensing if the duties they perform relating to insurance are incidental and no direct payment of income derives from any insurance product

All of the following disbursements from a Premium Fund Trust Account are legally allowed, EXCEPT: A: returned premiums due to an insured. B: the payment of rent for the insurance agency. C: commissions to producers. D: bank fees.

B Legal disbursement do not include normal overhead expenses; the PFTA may not be used a general operating account.

In 2005, T bought her car brand new. In 2012, Q purchased T's car from her directly. In 2013, the car was in an accident causing a total loss. Who has the right to file a claim for the car? A: T B: Q C: T and Q have joint rights D: None of the Above

B. Insurable interest must exist at the time of policy issuance AND at the time of loss. When T sold her car, her interest in the property ceased. Therefore, since the accident occurred when Q owned the car, Q had insurable interest.

Which of the following physical losses to a covered auto could be covered by either collision or other than collision coverage? A: A car is stolen B: The windshield of the car is broken. C: The biggest bird on the planet Earth swoops down and strikes the covered auto causing great physical damage.== D: A teenage miscreant gleefully hits the covered auto with a ball peen hammer repeatedly.

B. Only broken glass can possibly be covered by either collision or other than collision coverage because a windshield can be broken due to a collision or for many other reasons including many of the named perils of other than collision coverage.

For open accounts receivable upon which a balance is due to the insurer, what is the maximum service charge a producer may assess to encourage timely payment within specified periods of 90 days of less? A: $20 B: 1.5% per month on the balance due. C: 1% per month on the balance due. D: 1.5% per year on he balance due.

B. The maximum service charge allowable in this circumstance may not exceed 1.5% per month.

According to Illinois use of credit rules, none of the following factors can be used by an insurer in the calculation of a an insurance score for consumers for underwriting purposes, EXCEPT: A: income B: credit score C: nationality D: marital status

B. Use of insurance scores based on income, nationality and marital status are some of the factors that may not be used in generating a consumer insurance score, however credit score can be used as a factor, just not the sole factor, for underwriting purposes.

Q has just finished the first year as an insurance producer in which Q placed $50,000 of premium on the life of Q's spouse and another $40,000 of premium of the life of several doctors with whom Q is unrelated. Based on these numbers, Q A: will receive a performance citation from the companies represented. B: will have his producer license denied upon a renewal request when the Director learns Q violated the controlled business law. C: has done an excellent job. D: has violated no insurance rules or regulations

B. Writing insurance business on the spouse of a producer is controlled business. The law allows controlled business but not if it exceeds 50% of the total premium collected in the first year after becoming licensed, a condition which can lead to license denial upon a renewal request

What action must the Director take toward the subject of a completed market conduct examination? A: Allow the subject at least 30 days to request a hearing. B: Notify the person examined of the contents of a verified report before it is made public. C: Issue a final written order immediately if any code violation is found during the examination. D: Any violation will result in a civil fine ranging from $1,000 to $50,000.

B: Notify the person examined of the contents of a verified report before it is made public

If an unearned premium refund is due upon a policy cancellation, the insurance company must make the refund within how many days of wither the cancellation or the date notice was received by the company?

Both short rate and pro rata refunds must be made within 30 days of the cancellation or the date the carrier received notice by the insured of a cancellation.

What is the greatest level of criminal prosecution that can result from producer rebating?

Both the producer and the client could be found guilty of a Class B misdemeanor.

When an employee, whether they are acting alone or in collusion with other employees, commits a robbery or burglary that causes loss or damage to an employer, the only policy that will cover such loss is: A: Employee Robbery B: Employee Burglary C: Employee Dishonesty D: Employee Forgery

C

X works at the Blowout Tire Company and one weekend when he is driving down the highway to a family picnic, one of his tires blows out injuring him and his family. X learns that the tire was defective and he sues his employer for his injuries and for those of his family. Is this lawsuit allowed? A: No, the worker can only collect for injuries through the WC process and is not allowed to sue an employer directly. B: The family of X may sue for injuries but not X. C: This lawsuit is allowed since X is suing as a customer and not as an employee under the legal theory of dual-capacity. D: X is allowed to sue because this is a classic case of lost consortium.

C

A retired man offers to transport kids to and from functions of his church in his personal vehicle, without charge, to help out his congregation. The man then calls his insurance agent, reveals his plan of volunteer service and learns A: that his personal auto policy will not cover such use by an insured. B: that such use of his vehicle will result in a small premium surcharge to cover the extra potential liability. C: that an insurer cannot refuse to insure or impose an extra charge for being a volunteer driver for a charitable organization. D: that such activity is grounds for policy cancellation.

C. A company cannot refuse to insure or impose a surcharge because a volunteer driver transports people by an insured vehicle in association with a charitable organization.

An applicant for motor vehicle coverage who provides an address at which they do not actually live is guilty of A: a misdemeanor. B: a felony. C: a business offense. D: nothing.

C. An applicant for motor vehicle insurance must provide the actual address at which they reside to the insurance company and if they knowingly violate this law, they are guilty of a business offence.

If a vehicle registration is suspended by the Secretary of State for failing to furnish proof of auto liability insurance, in addition to a reinstatement fee what else is required for vehicle registration reinstatement? A: Possible additional fines. B: A required classroom course on vehicle owner responsibilities. C: Valid proof of insurance. D: A suspension of the vehicle owner's driver's license.

C. Beside any applicable reinstatement fee or mandatory suspension time, valid proof of insurance is still required before any vehicle reinstatement can take place.

What type of application must be filed to obtain a business entity license? A: Producer application B: Business Agency Form C: Uniform Business Entity Application D: Assumed Name Act Form

C. Establishing a business entity requires the completion, by a resident licensed agent, of a Uniform Business Entity Application, which is available through the National Producer Database at NIPR.COM.

Workers Compensation covers all of the following employee claims, EXCEPT: A: An employee who dies on the job. B: An employee who experiences a bodily injury arising out of employment activities. C: Illness that may or may not arise from employment activities. D: Employee disability as a result of employment activities.

C. Illness must be occupational to be covered under WC. The worker must prove that, but for the employment activities engaged in by the employee, the illness they have would not exist. This is sometimes quite difficult to prove.

To own a Property policy, an insured must have insurable interest: A: At the time of application B: At the time of loss C: At the time of policy inception and the time of actual loss D: At the time of application and at the time of policy issuance

C. Insurable interest is when an insured has a loss potential tied to a property. Insurable interest must be established at the time of policy inception as well as the time of actual loss.

The deductible that must be paid in an Umbrella policy is known as: A: Self-Insured Deductible B: Self-Insured Reporting C: Self-Insured Retention D: Self-Insured Umbrella

C. SIR or Self-insured Retention is the deductible that must be paid before the Umbrella will cover excess liability losses.

The Guarantee Fund has the duty to investigate claims brought against the Fund and to then A: send them to arbitration for settlement. B: partially pay only valid claims. C: deny all claims for which the Fund is not obligated to pay loss. D: seek the approval of the Director to adjust all claims brought.

C. The Fund must adjust, settle and pay covered claims to the extent of the Fund's obligation and to deny all other claims.

Which of the following is not true regarding a Surety Bond: A: The obligee is promised by the principal. B: The Guarantor financially backs the promise of the obligor. C: The surety bond is insurance because there is a risk transfer to the Guarantor. D: The Surety bond is a guarantee for performance made by the obligor.

C. The Principal, also known as obligor, makes a promise of performance to the obligee which in turn is financially backed by the Guarantor. Bonds are different from insurance because there is no risk transfer with the expectation of loss.

Why might the Secretary of State require a vehicle owner to affirm whether or not the vehicle seeking renewal registration has current auto liability coverage in force? A: If the Secretary suspects vehicle owners in certain zip codes likely have a higher degree of noncompliance in this area than other vehicle owners. B: To enable the Secretary to precisely target vehicle owners who are most likely to be noncompliant. C: The Secretary is required by state law to do random sampling of vehicle owners to affirm auto liability coverage. D: Because the Secretary must check each vehicle registration to make sure coverage for auto liability is in force prior to registration renewal.

C. The Secretary is required to do random sampling of a small percentage of vehicle registrations to determine estimated compliance with the mandatory auto liability insurance laws.

What is the main reason for the controlled business law?

C. The controlled business statute is mainly designed to prevent licensing for the main purpose of depriving producers from earning a living because people are selling insurance to themselves, spouse or employers.

If a driver qualifies for a defensive driver's discount, for which length of time will a premium reduction be in effect? A: 1 year B: 2 years C: 3 years D: 4 years

C. The premium reduction for those qualifying for defensive driver's discount is for a maximum period of three years, unless revoked earlier due to poor driving.

6 years ago an insured purchased a brand new car for $40,000. The car has depreciated at a rate of $5,000 each year. The car was totally destroyed in an accident. To replace the same car today would cost $45,000. How much will the insurer pay to replace the car based off ACV valuation? A: $45,000 B: $40,000 C: $35,000 D: $15,000==

D

All of the following are included in First Party Response Cyber Insurance EXCEPT: A: Forensic services to investigate a breach B: Crisis management expenses C: Business Interruption Expense D: Third Party Auto Liability

D

Deferred or renewal commissions may be paid under which of the following conditions? A: The producer must be licensed at the time of renewal commission payments. B: If the producer is still under contract with the insurer through whom the policy was originally written regardless of whether or not the producer was licensed at the time of the sale. C: With the approval of the Director of Insurance. D: If the producer was licensed at the time of sale they are entitled to receive deferred compensation even if not licensed at the time renewal commissions are paid.

D

One day B is picking up her four year old from preschool. Since it is nearing the end of the school year, the weather is quite warm. B decides to leave her car running, unlocked with the air conditioning on so the car is nice and cool. B does not want her car to get stolen, but theorizes that if loss were to occur, that is why she pays for auto insurance. B has just demonstrated a: A: Physical hazard B: Moral hazard C: Predisposition to theft D: Morale hazard

D

Which of the following statements are CORRECT regarding Arbitration? A: it is used when the parties cannot agree on how much to pay for loss B: it is used when the insurer does not want to pay covered claims C: it is used only when the insured pays for the entire cost of Arbitration D: None of the Above

D

Which of the following is a prohibited investment option into which to place Premium Fund Trust Account monies? A: US government securities maturing in no longer than one year. B: A non-interest bearing bank account in an institution under the jurisdiction of Illinois courts. C: Highly rated commercial paper. D: A brokerage account in which options futures are traded.

D PFTA money must be put in safe, secure and conservative accounts as regulated by state law which strictly prohibits placing such monies into accounts where risk to principal is great such as securities options, stock futures or purchasing equities on margin.

Which of the following methods of valuation reinforces indemnity? A: Negligence B: Replacement Cost C: Guaranteed Cash Value D: Actual Cash Value

D. ACV or Actual Cash Value is the method of valuation which reinforces indemnity since the insurer considers usage (depreciation) into the amount that they will pay for covered losses.

Which of the following statements BEST describes the difference between bonding and insurance? A: Insurance only has two parties, bonds have three.== B: Insurance pays on the expectation of loss whereas bonding guarantees loss will occur C: Once loss occurs in insurance there is no expectation of repayment in most cases whereas in bonding, the guarantor has right to recover loss payment from the obligor. D: A and C only

D. In Bonding, there are three parties and the insurer has a right to recover loss payment from the principal, unlike insurance. In addition, in bonds, no loss is expected, one party vouches for another party.

Which coverage is needed when the owner of a business insures a passenger type vehicle under a commercial auto form but also drives the covered auto for personal use? A: Personal Auto Policy. B: Drive Other Car. C: Business Auto Policy. D: Individual Insured.

D. Individual insured is a commercial endorsement that is used when one or more autos of the private passenger type are to be covered under a commercial auto form and the owner will also be using the vehicle for personal use and desires coverage the equivalent of PAP coverage but under the commercial auto form.

Which of the following statements about an insurer's intent not to renew a property or casualty policy is the most accurate? A: A company can nonrenew for any reason as long as the notice is properly given far enough in advance. B: Nonrenewal can end a policy early under certain conditions. C: A personal fire policy requires the greatest advance notice of all property contracts. D: Generally, an insurer must provide more notice to a commercial insured than to insureds with personal lines coverages.

D. It normally takes commercial insurance customers more time to assess property and casualty risk transfer needs, therefore the law requires carriers to provide more advance notice of the intent not to renew to commercial customers compared with personal lines customers.

Exclusions: A: Limit the scope of benefits B: List which types of perils are not covered by the contract== C: limits the wording of the insuring agreements D: All of the Above

D. The Exclusions listed in the policy limits the scope of coverage. In addition, the exclusions limit wording of the insuring agreements as well as the definition of perils.

At his license revocation hearing, producer Q is found to have violated fifteen separate causes of conduct each of each is sufficient cause for license revocation. What is the maximum civil penalty that could be imposed on Q for these actions? A: $1,000 B: $5,000 C: $10,000 D: $100,000

D. The maximum civil penalty for violations of a the Director's lawful order under the suspension, revocation and denial of license statutes is $100,000.

All of the following actions may be taken against an employer who has not purchased a Workers Compensation policy, if required to do so, EXCEPT: A: A fine for each day of default.== B: The employer will be liable for any lawsuits filed that would have been covered under the policy. C: A daily fine can be assessed for each and every day the employer was required to have a policy in effect but did not. D: The employer is guilty of a misdemeanor and can be fined, imprisoned, or both.

D. Workers' Compensation policies are compulsory in Illinois and failure to comply can lead to daily fines for default and the employer assumes liability for any lawsuits filed. However, it is not a criminal offence not to purchase the insurance.

Producer E is properly licensed to engage in premium finance and has just made a loan to an insured in the amount of $750. What is the maximum service charge allowable for making this loan?

On premiums loans that are $500 up to $999, the maximum allowable service charge is $30.

in a liability policy, damages that are paid to victims for pain and suffering would be deemed as:

General damages compensate a victim for losses due to pain and suffering which are subjective and hard to determine.

What is the reinstatement fee and suspension time for vehicle registration if the Secretary of State determines a person has submitted false proof of insurance?

If the Secretary deems that false proof of insurance has been submitted, there is a 6 month vehicle registration suspension once a $200 reinstatement fee has been paid.

How does an employee become eligible for workers' compensation policy issued by the Illinois Assigned Risk Pool?

If the insured business is rejected by at least 2 carriers within any 60 day period in the standard insurance market (and one of the rejections was from their current carrier), then that insured is eligible for the Illinois Assigned Risk Pool for a Workers? Compensation policy.

Company Q, a health insurer headquartered in Indiana is advertising directly to Illinois residents about their health plans but Company Q is not a licensed insurance company in Illinois. Company Q is violating which of the following Illinois insurance regulations? A: False Advertising B: Twisting C: Misrepresentation D: Defamation

It is misrepresentation in Illinois for an insurer without a certificate of authority to advertise or prospect for sales leads in Illinois.

Participation in the IAIP is mandatory by which of the following carriers?

Participation in the IAIP by all admitted (licensed) auto insurers in Illinois is mandatory or their certificate of authority may be suspended or revoked.

Which of the following would not be eligible for Mobile Equipment coverage? A: Cherry Pickers that raise and lower workers B: Street Cleaners C: Air compressors attached to a truck D: all the above

Mobile equipment coverage applies to vehicles and machinery that are not considered autos for insurance purposes. Power cranes, road construction equipment, farm machinery and non-self propelled machinery. Vehicles that are self-propelled that include air compressors, pumps, welding and spraying equipment or vehicles such as street cleaners, and cherry pickers or deemed to be autos under law require different insurance.

Which of the following period of time meets the definition of reasonable promptness as it pertains to an insurance company, under Regulation 919?

Reasonable promptness means 15 days from receipt of communication from a claimant or another insured.

Statements made by an applicant for property Insurance which, in the opinion of the applicant, are true to the best of his or her knowledge are called:

Representation

If an insured requests loss information from an insurance company pertaining to an auto policy, how many previous years of loss information must be provided to the insured?

Requests for auto loss information must include the previous five years, while all other property and casualty policies, other than Workers' Compensation, must provide the previous three years of loss information.

special damages

Special damages are actual out of pocket expenses an insured may incur such as doctor bills or lost wages from missed work. Special damages are objective and easy to calculate.

The regulation that requires a producer to sign their name on an individual or group life or accident and health insurance application is called

The Disclosure Rule

An insured, with Part D coverage, has his car stolen and incurs extra transportation expenses of about $30 per day for the ten days since the theft, when the car is recovered. How much will his policy reimburse for this expense?

There is a 48 hour waiting period after a car is stolen before the $20 per day transportation expense limit can be claimed. Since the insured was without the car for ten days, only eight are recoverable for the reimbursement: $20 multiplied by 8 days equals $160.

If an auto insurer requests the applicant's loss experience with a prior carrier, the applicant must provide this information within how many days to avoid a refusal or surcharge?

The applicant must provide the prior carrier loss experience within 21 days after the application for auto insurance is filed or the company can refuse to insure or impose a surcharge.

A defensive driver's discount is available to people of what age upon successful completion of a qualifying accident prevention course?

The discount is for those over the age of 55 which includes those attaining the age of 55,

If all conditions have been met, within how many days must an auto insurer disclose the amount of liability coverage that is in place on an insured upon receipt of written request for such disclosure?

The information must be forwarded to the requesting party with 30 days of receipt of the request for liability coverage disclosure.

if all conditions have been met, within how many days must an auto insurer disclose the amount of liability coverage that is in place on an insured upon receipt of written request for such disclosure?

The information must be forwarded to the requesting party with 30 days of receipt of the request for liability coverage disclosure.

Producer S has just collected the first year premium and an application from a client. Within how many days is S expected to turn the money over to the insurance company on whose behalf S collected the premium?

The law says that a producer who holds premiums funds in excess of 15 days without depositing them into a Premium Fund Trust Account has breached their fiduciary duty.

If an appeal hearing takes place at the request of the insured for the cancellation or nonrenewal of a personal auto or fire policy, what is the maximum cost to the losing party?

The losing party of such a hearing must pay a cost not to exceed $100.

R has the state mandatory liability coverage and while driving in a legally intoxicated state, hits six people crossing a street at one time, injuring five and killing one. What is the maximum amount R's liability policy will pay to all six victim's in the accident?

The mandated liability minimum coverages in Illinois are $25,000 per person in one accident for bodily injury or death; $50,000 for bodily injury or death of 2 or more people in one accident.

UIM FORMULA: UIM (of injured driver) - BI (at fault driver) = UIM Payment Amount

UIM FORMULA: UIM (of injured driver) - BI (at fault driver) = UIM Payment Amount

A personal auto policy which has been continuously in effect for more than five years MAY NOT be nonrenewed for which of the following reasons? A: On the basis of using an insured vehicle to transport explosives. B: On the basis of nonpayment of premiums. C: On the basis of being convicted of leaving the scene of a motor vehicle accident. D: On the basis of submitting a fraudulent claim.

b

If a producer is found guilty of defamation, their producer license may be suspended, revoked or denied and additionally they may be assessed a civil penalty of A: up to $5,000 for a business offense. B: up to $1,000 for violating a cease and desist order of the Director. C: from $200 to $10,000. D: a minimum of $1,000 to a maximum of $10,000.

c

All of the following vehicles are exempt from mandatory liability insurance requirements, EXCEPT: A: Bob has a very old car that does not run and he has placed the vehicle in storage. B: Sally is an Illinois State trooper and only uses her assigned vehicle on duty. C: Jim uses his employer's owned vehicles on occasion to run business errands for his boss. D: Erica uses a combine on her family farm.

c Certain vehicle categories are exempt for the mandatory automobile law but an vehicle used as a personal auto or for business reasons generally requires compliance with the mandatory insurance law.

N just purchased a CGL policy for his business and wants to understand the clause explaining nonrenewal of the contract. N should read the:

conditions

Arbitration:

is the process used when the insured and insurer cannot agree on how to settle a claim

If a Cease and Desist order is issued the Director must serve notice to the recipient of the order of a hearing to be held at a fixed time and place which

may not be less than 20 or more than 30 days after the notice of hearing is served to the recipient

J is a doctor and accidently amputates the patient's wrong leg. The type of policy that would protect J's actions is:

medical malpractice When a Doctor, Surgeon and/or Dentist must pay damages for a medical incident in which the professional service was not delivered, Malpractice insurance pays the loss

T caused an accident that caused B injuries that forced him to miss a week of work. The type of damages that B would collect for lost wages are:

special damages